DESIRABILITY AND SEQUENCE OF LIBERALIZATION AND STRUCTURAL REFORM POLICIES IN A MODEL WITH INFORMAL SECTOR

Ujjaini Mukhopadhyay

Review of Urban & Regional Development Studies, 2008, vol. 20, issue 1, 70-84

Abstract: The paper develops a three†sector general equilibrium model with informal sector and examines the welfare effects of liberalization and structural reform in the presence of labor and capital market distortions. It attempts to determine a credible sequence of reforms that may be the most welfare†enhancing, since implementation of reforms in all the markets at a single stage may be neither feasible nor optimal. Foreign capital is welfare†improving only in the presence of labor market distortion, while welfare deteriorates if the capital market is distorted. While tariff and capital market reforms may be welfare†enhancing in the absence of labor market distortion, labor market reform may intensify the formal†informal wage gap and have a worsening effect on welfare in the presence of tariff distortion and capital market imperfection. One of the plausible sequences of reforms may be to initially undertake tariff reform followed by capital and labor market reforms, respectively.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/j.1467-940X.2008.00142.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:revurb:v:20:y:2008:i:1:p:70-84

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0917-0553

Access Statistics for this article

More articles in Review of Urban & Regional Development Studies from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().